groupe sqli reference document 2002 · sqli is a form of limited liability company (a french...

GROUPE SQLI

REFERENCE DOCUMENT

2002

Reference Document 2002

Groupe SQLI – Confidential Page 2

In application of its ruling no. 95-91, la Commission des opérations de bourse (COB -the French Stock Exchange Watchdog) recorded this reference document on 09/07/03under number R, 03-154. It can only be used to support a financial operation if it iscompleted with an operating note prescribed by the la Commission des opérations debourse. This reference document has been drawn up by the issuer and commits theresponsibility of its signatories. This record, carried out during an examination of thepertinence and coherence of the information given on the company's financialsituation, does not implicate the authentication of the accounting and financialelements presented.Warning: The COB brings the public’s attention to the fact that the company recordedtotal revenues of 44 million euros and a loss of 9.3million euros at the end of itsfinancial year on 31 December 2002.



TABLE OF CONTENTS

1 PERSON RESPONSIBLE FOR THE REFERENCE DOCUMENT AND PERSONSRESPONSIBLE FOR THE CONTROL OF THE FINANCIAL STATEMENTS ....................... 5

1.1 PERSON RESPONSIBLE FOR THE REFERENCE DOCUMENT ....................................................................51.2 CERTIFICATION BY PERSON REPONSIBLE FOR THE REFERENCE DOCUMENT..............................................51.3 NAMES, ADDRESSES AND QUALIFICATIONS OF THE STATUTORY AUDITORS OF THE FINANCIAL STATEMENTS.....51.4 ATTESTATION BY THE STATUTORY AUDITORS CONCERNING THE REFERENCE DOCUMENT ............................61.5 PERSON RESPONSIBLE FOR INFORMATION.....................................................................................71.6 INFORMATION POLICY .............................................................................................................7

2 INFORMATION ABOUT THE COMPANY AND ITS CAPITAL.......................................... 8

2.1 GENERAL INFORMATION ABOUT THE COMPANY ...............................................................................82.2 GENERAL INFORMATION ABOUT THE COMPANY’S AUTHORISED CAPITAL. ..............................................162.3 DIVIDENDS .........................................................................................................................292.4 THE MARKET FOR THE COMPANY’S SECURITIES .............................................................................29

3 PRESENTATION OF THE COMPANY'S ACTIVITIES..................................................... 32

3.1 GENERAL PRESENTATION........................................................................................................323.2 PRESENTATION OF THE MARKET ...............................................................................................353.3 THE COMPANY’S POSITIONING .................................................................................................373.4 DESCRIPTION OF THE GROUP’S ACTIVITIES..................................................................................423.5 CUSTOMERS........................................................................................................................453.6 HUMAN RESOURCES ..............................................................................................................473.7 RISK ANALYSIS ....................................................................................................................513.8 DEVELOPMENT PLAN .............................................................................................................553.9 EXCEPTIONALS AND LITIGATION...............................................................................................57

4 MANAGEMENT REPORT AND SPECIAL BOARD OF DIRECTORS REPORT.................. 58

4.1 BOARD OF DIRECTORS MANAGEMENT REPORT...............................................................................584.2 SPECIAL BOARD OF DIRECTORS REPORT......................................................................................75

5 CONSOLIDATED ACCOUNTS AS OF 31 DECEMBER 2002........................................... 80

5.1 THE STATUTORY AUDITORS REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE FINANCIALYEAR ENDED 31 DECEMBER 2002 .............................................................................................80

5.2 CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2002 ..................................................815.3 ANNEX TO THE CONSOLIDATED ACCOUNTS AS OF 31 DECEMBER 2002 ...............................................83

6 CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2002 ................. 102

6.1 GENERAL STATUTORY AUDITORS REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THEFINANCIAL YEAR ENDED 31 DECEMBER 2002 ............................................................................. 102

6.2 COMPANY ACCOUNTS AS OF 31 DECEMBER 2002 ........................................................................ 1046.3 ANNEX TO THE COMPANY ACCOUNTS AS OF 31 DECEMBER 2002..................................................... 1096.4 ADDITIONAL INFORMATION CONCERNING THE CONSOLIDATED ANNEX .......................... 1276.5 SPECIAL STATUTORY AUDITORS REPORT ON CONTRACTUAL AGREEMENTS AS OF THE END OF THE FINANCIAL

YEAR 31 DECEMBER 2002.................................................................................................... 128

7 ADMINISTRATION, MANAGEMENT AND SUPERVISORY BODIES ........................... 136

7.1 SUPERVISORY BOARD.......................................................................................................... 1367.2 MANAGEMENT REMUNERATION............................................................................................... 137



7.3 OTHER MANAGEMENT BENEFITS.............................................................................................. 1377.4 OPTIONS GRANTED TO THE MEMBERS OF THE ADMINISTRATION AND MANAGEMENT BODIES .................... 1377.5 EMPLOYEE INCENTIVES......................................................................................................... 1377.6 CORPORATE GOVERNANCE.................................................................................................... 1387.7 REMUNERATION OF CONTROL BODIES ...................................................................................... 140

8 EVENTS THAT HAVE HAPPENED SINCE THE CLOSED OF THE 2002 FINANCIALYEAR........................................................................................................................... 141

8.1 RECAPITALISATION OF THE ABCIAL SUBSIDIARY.......................................................................... 1418.2 FINANCIAL PRESS RELEASE, 13 MAY 2003................................................................................ 141

9 GLOSSARY .................................................................................................................. 142



1 PERSON RESPONSIBLE FOR THE REFERENCE DOCUMENT ANDPERSONS RESPONSIBLE FOR THE CONTROL OF THE FINANCIAL

STATEMENTS

1.1 PERSON RESPONSIBLE FOR THE REFERENCE DOCUMENT

Mr Yahya EL MIR, Chairman of the Board of Directors of SQLI.

1.2 CERTIFICATION BY PERSON REPONSIBLE FOR THE REFERENCE DOCUMENT

To the best of our knowledge, the information presented in this reference documentfairly reflects the current situation and includes all information required by investors toassess the net asset position, activities, financial position, financial results, and futureprospects of the issuer. We confirm that no information likely to have a materialimpact on the interpretation of this document has been omitted.

Paris, 07/07/03Yahya EL MIR

Chairman of the Board of Directors of SQLI

1.3 NAMES, ADDRESSES AND QUALIFICATIONS OF THE STATUTORY AUDITORS OF THE FINANCIALSTATEMENTS

The table of auditors’ fees can be found in chapter 7.7.

1.3.1 INCUMBENT STATUTORY AUDITORS

Fiduciaire de la TourRepresented by Mr Jean-Pierre PAUMARD28, rue Ginoux75015 Paris

Statutory Auditors registered under the number 2060 at the Paris Regions’ list ofAccountancy Firms and a member of “la Compagnie Régionale des Commissaires auxComptes de Paris”, a Paris based Accounting and Auditing body.

First nominated: 30 July 1995. Mandate renewed on 21 June 2001.

Mandate expiry date: mandate for six financial years that will expire following theOrdinary General Shareholders Meeting which will be called to assess the financialstatements for the financial year ending 31 December 2006.

Constantin AssociésRepresented by Mr Jean Marc BASTIER and Mr Michel BONHOMME26, rue de Marignan75008 Paris

First nominated: 21 March 2000.




1.3.2 AUXILIARY STATUTORY AUDITORS

Mr Dominique BEYER40 bis, rue Boissière75116 Paris

First nominated: 20 February 2000, replacing Mr Jean-Marc Robinet, 53, rue EugèneCarrière, 75018 Paris - the former auxiliary auditors to the Company. This mandatewas renewed on 21 June 2001.


Mr François-Xavier AMEYE114, rue Marius Aufan92532 Levallois-Perret Cedex

First nominated: 21 March 2000.


1.4 ATTESTATION BY THE STATUTORY AUDITORS CONCERNING THE REFERENCE DOCUMENT

Dear Sir, Madam,

In our capacity as statutory auditors of SQLI and in compliance with the COBregulation 95-01, we have verified the information with respect to the financialposition and past financial statements included in this accompanying ReferenceDocument according to accepted French accounting principles.

This reference document has been put together under the responsibility of Mr YahyaEL MIR, Chairman of the Board of Directors of SQLI. Our responsibility is to issue anopinion of the fairness of the information contained therein with respect to thefinancial position and financial statements.

This review consisted in assessing the fairness of the information on the financialposition and financial statements in accordance with French professional standardsand verifying their consistency with the audited accounts. We also reviewed otherfinancial information contained in this reference document in order to identify anysignificant inconsistency with information in respect of the financial position andfinancial statements, and to bring your attention to any obvious misstatements wenoted based on our overall understanding of the company gained through our audit.The forecasts provided in the document and obtained through a structured processare in line with the expectations and intentions of Management.

We issued an unqualified opinion on the annual and consolidated accounts for theyears ended 31 December 2000 and 31 December 2001 approved by the Board ofDirectors and drawn up according to French GAAP and which we have audited inaccordance with French accounting standards.

We have nothing to report with respect to the fairness of the information on thefinancial position and financial statements contained in this Shelf RegistrationDocument.



Paris, 7 July 2003

The Statutory Auditors

Constantin Associés Fiduciaire de la Tour

Jean-Marc Bastier Michel Bonhomme Jean-Pierre Paumard

1.5 PERSON RESPONSIBLE FOR INFORMATION

Mr Yahya EL MIRChairman of the Board of Directors of SQLIImmeuble Le Pressensé268, avenue du Président Wilson93210 La Plaine Saint-DenisTel : 01 55 93 26 00 – Fax : 01 55 93 26 01www.sqli.fr

1.6 INFORMATION POLICY

The company for the most part communicates with its shareholders by the means ofits website (www.sqli.com / www.sqli.fr) as well as by its Financial Communicationsagency (www.equityinfos.com).

Quarterly and bi-annual financial announcements are made using press releasesaccording to the following annual time schedule:

? Total Revenues 2002: 14 February 2003? Earnings 2002: 15 April 2003? Total Revenues 1st Quarter 2003: 14 May 2003? Total Revenues 1st Half 2003: 12 August 2003? Earnings 1st Half 2003: 9 October 2003? Total Revenues 3rd Quarter 2003: 14 November 2003

Investor and Analyst Meetings take place at the time of the annoucements of the half-yearly results. The meeting concerning 2002 results took place on 15 April 2003 andthe meeting concerning the 1st half 2003 results will take place in October 2003, thefinal date has not yet been set.



2 INFORMATION ABOUT THE COMPANY AND ITS CAPITAL

2.1 GENERAL INFORMATION ABOUT THE COMPANY

It was proposed at the Mixed General Shareholders Meeting on 26 June 2002 tochange the company’s legal status to that of a SA (Société Anonyme) with aManagement Committee and an Oversight Committee

2.1.1 COMPANY'S NAME (ARTICLE 2)

SQLI

2.1.2 HEADQUARTERS (ARTICLE 4)

Immeuble Le Pressensé268, avenue du Président Wilson93210 La Plaine Saint-Denis

2.1.3 LEGAL FORM (ARTICLE 1)

SQLI is a form of limited liability company (a French Société Anonyme) and is subjectto the requirements of the French Commercial Code (Code de Commerce), and theExecutive Order no. 67-236 of 23 March 1967 relating to commercial companies.

2.1.4 DATE OF INCOPORATION

SQLI was incorporated on 22 March 1990.

2.1.5 COMMERCIAL REGISTER

SQLI has been listed on the Paris Commercial Register under number 353 861 909since 28 March 1990.

2.1.6 LEGAL CORPORATE TENDER

The legal tenure of the Company is fixed at 99 years commencing 22 March 1990,unless it is prolonged or dissolved beforehand in accordance with the Company’sstatutes.

2.1.7 PURPOSE(ARTICLE 3)

The Company’s purpose, both directly and indirectly, in France and in all othercountries is as follows:? Communications and web marketing consulting,? The design and ergonomics of websites,? Consulting regarding the choice of IT systems architecture and IT systems,? The design and development of IT software,? The integration and installation of IT systems,? The distribution of IT software,? IT training, and? all industrial and commercial operations pertaining to:

? the creation, the purchasing, the hiring, the management of businesses, thetaking of leases, the installation, the exploitation of any establishments,businesses, factories, workshops, pertaining to one or other of theCompany's activities;

? the update, the purchase, the exploitation or the cessation of anyprocedure/process or patent concerning the Company’s activities;

? the direct or indirect participation of the Company in any finance, propertyor asset operations or industrial or commercial companies that areassociated with the Company’s purpose or a similar or connected purpose;

? all operations that contribute to the achievement of the Company’spurpose.



2.1.8 BUSINESS CODE (APE)

721 Z

2.1.9 INFORMATION AND THE CONSULTATION OF DOCUMENTS (ARTICLES 11 AND 32)

Company documentation can be examined according to the legal conditions at SQLI’sheadquarters.

2.1.10 BUSINESS CALENDAR (ARTICLE 5)

Every financial year runs for 12 months commencing on 1 January of each year andfinishing on 31 December.

2.1.11 STATUTORY AFFECTATION AND DISTRIBUTION OF PROFITS (ARTICLE 35)

First of all the sums that are to be taken off in accordance with the application of thelaw are taken off from the year’s profits less, if appropriate, its carried forward lossesfrom previous business periods. Five percent is then taken off the profits to constitutethe legally required reserve fund (this is no longer necessary once this fund reachesone tenth of the Company’s capital and restarts again when it falls below one tenth ofthe Company’s capital).

Distributable profits are constituted of year end profits less losses carried over fromprevious business years, less the sum allocated in accordance with the law or theCompany’s statutes to the Company’s reserve fund plus any profits carried forward.

On top of this profit, the General Shareholders Meeting can then take off any sumsthat it judges pertinent to affect to optional, ordinary and extraordinary reserve fundsor it can postpone the distribution of profits again.

The balance, if there is any, is shared out between all of the shares in proportion tothe amount paid up and non-depreciated.

Except for the instance of a reduction in capital, no distribution, however, can bemade to shareholders when the shareholders equity is, or becomes as a result of sucha distribution, less than the capital with the reserves that the law or the statutes donot allow to be distributed.

The General Shareholders Meeting can decide to distribute sums taken from thereserves it can make use of in order to provide or make up a dividend or to make anexceptional dividend; in this case the decision will expressly indicate which reserveswill be used for these distributions. However dividends are, by priority, to bedistributed from distributable profits arising out of the financial year.

If there are any losses, these are, upon approval of the financial statements by theGeneral Shareholders Meeting, written up into a special account to be set off againstthe profits of previous financial years until they are used up.

2.1.12 THE PAYMENT OF DIVIDENDS (ARTICLE 36)

TThe General Shareholders Meeting that rules on the financial statements of thebusiness year can offer to each shareholder all or a part of the dividend to bedistributed, or the dividend accruals an option between the payment of the dividend(or the dividend accruals) in cash or in shares.

The procedures for the payment of dividends in cash are laid down by the GeneralShareholders Meeting or failing that by the Board of Directors.



The payment of dividends, however, must take place within a maximum timeframe of9 months following the end of the financial year unless this period is prolongedsubject to legal authorisation.

When a balance sheet that is drawn up during, or at the end of, a financial year andcertified by the statutory auditors shows that, since the end of the previous financialyear and after any amortisation, depreciation and allocations to provisions anddeducting if necessary any previous losses recorded and those sums to be allocated toreserves in application of the law or statutes and taking into account any profitsbrought forward has made a profit, the Company can distribute dividend accrualsbefore the approval of the year’s financial statements. The amount of these accrualscan not exceed the profit as just defined.

The Company can not demand of the shareholders to redo the dividend distribution,unless the distribution was effectuated in violation of the legal directives and if theCompany can prove that the beneficiaries knew about the irregular nature of thedistribution of the dividend at the moment that it was effectuated, or could not havenot known about it given the circumstances.

After three years following the payment of the dividends repetition of the distributionis prohibited. Any dividends that have not been claimed after five years followingtheir payment are prohibited.

2.1.13 GENERAL SHAREHOLDERS MEETINGS (ARTICLES 23 TO 31)

Convocation of Meetings (article 24 of the Statutes)

General Shareholder Meetings are convened by the Board of Directors or failing thatby the Statutory Auditors, or by a proxy appointed by the Chairmen of the Tribunal deCommerce (Commercial Court) subsequent to the request of one of severalshareholders which together hold at least one tenth of the Company’s capital.

(…)

General Shareholder Meetings are held at the Company’s headquarters or at any otherplace indicated in the convocation announcement. A notice about the meetingcontaining the information prescribed by article 130 of the executive decree n°67-236dated the 23rd of March 1967 is published in the bulletin of obligatory legalannouncements (BALO) at least thirty (30) days before the date of the GeneralShareholders Meeting.

The convocation is made at least fifteen (15) days before the date of the GeneralShareholders Meeting by a notice made in the legal announcements newspaper of thecounty (French Département) in which the Company has its headquarters and by anotice made in the bulletin of obligatory legal announcements (BALO) and by anordinary letter addressed to each shareholder holding shares (of a nominative nature)in the Company’s stock. (…)

Meeting Agenda (article 25 of the Statutes)

The General Shareholders Meeting agenda is drawn up by the author of theconvocation. One or more shareholders, who together hold the required quota ofcapital and acting in accordance with the timeframe and conditions set out in the law,can request, by registered post with notification of receipt, the inclusion in the agendafor the General Shareholders Meeting of other resolutions.

The General Shareholders Meeting cannot deliberate on a question that has not beenwritten up in the agenda, which cannot be modified by a second convocation. The



Meeting can however revoke one or several members of the Board of Directors andmove to replace them.

2.1.14 ACCESS TO THE MEETINGS AND POWERS (ARTICLE 26)

Every shareholder has the right to participate in General Shareholder Meetings and inthe deliberations either personally or by proxy regardless of the amount of sharess/he holds, upon proof of identity as soon as her/his shares are fully paid up andregistered in her/his name at least five days before the date of the Meeting.

Every shareholder has the right to vote using a postal vote using a form that s/he canobtain according to the conditions laid out in the notice of the meeting and theconvocation notice for the General Shareholders Meeting.

A shareholder can only be represented by his/her spouse or by another shareholdergiven proxy rights.

2.1.15 HOLDING OF THE MEETING, OFFICES, MINUTES (ARTICLE 27)

A register is taken at every Shareholder Meeting in conformance with the legalrequirements.

Shareholder Meetings are chaired by the Chairman of the Board of Directors or inher/his absence by a member of the Board who has been assigned this task by theSupervisory Board. Failing this, the Shareholder Meeting elects a chairman. If theMeeting has been convened by the Statutory Auditors or by a legal proxy, theShareholder Meeting is chaired by the author of the convocation. Failing this, theShareholder Meeting elects a chairman.

Two shareholders, present and willing, representing themselves and by proxy thebiggest amount of votes carry out the function of vote scrutinizers. The holders ofthis office then designate a secretary who cannot be a shareholder.

Those holding this office have the task of checking, certifying and signing the register,upholding the orderliness of the debates, sorting out any ensuing incidents,overseeing the voting and to ensure its correctness and making sure that the minutesof the meeting have been drawn up.

2.1.16 DOUBLE CALCULATION OF THE QUORUM, VOTING IN THE GENERAL SHAREHOLDERSMEETING AND THE CONDITIONS FOR ACQUIRING DOUBLE VOTING RIGHTS (ARTICLES 11,AND 28 THROUGH 31)

In the General Shareholder Meetings voting rights attached to shares in theCompany’s capital or interest are proportional to the proportion of capital that theyrepresent. Each share has one vote.

Double voting rights

As an exception to what has just been stated, voting rights which confer double theamount of votes per share to that normally conferred with respect to the proportion ofcapital represented are attributed as follows:

? to all shares that are entirely paid up and for which can be proven anominative registration dating back at least three (3) years in the name of thesame shareholder;

? to all nominative shares attributed to a shareholder, in the case of a capitalincrease by incorporations of reserves, profits or share premium, at the rateof old shares that benefit from this right



Double voting rights have been included in the statutes by the Mixed GeneralShareholders Meeting of March 21st 2000.

Double voting rights end for each share whose title has been converted ortransferred, except any nominative to nominative transfer as a result of inheritance orfamily donation.

A Double voting right can be removed by the decision of the Extraordinary GeneralShareholders Meeting, after it has been ratified by the special beneficiary shareholdersmeeting.

Limiting voting rights

No arrangement to limit voting rights has been made by the General ShareholdersMeeting.

Quorum

The quorum is calculated using all of the shares that make up the capital, except inSpecial Shareholder Meetings where it is calculated using all of the shares of theparticular share category concerned, all of these are calculated less those shareswhich hold no voting rights according to the dispositions laid out in the law.

In the case of postal voting, only those votes which are duly completed and receivedby the Company at least three days before the date of the General ShareholderMeeting will be taken into account in the calculation of the quorum.

Voting takes place by raising one’s hand, by a nominal call or by a secret balletaccording to the decision of the office of the General Shareholder Meeting or by theshareholders. Shareholders can also make use of postal voting.

2.1.17 DIFFERENT TYPES OF MEETING (ARTICLES 29 T0 31)

Ordinary General Shareholder Meeting

The Ordinary General Shareholder Meeting can take all decisions that go beyond thepowers of the Board of Directors and which do not include the changing of theCompany’s statutes. The Ordinary General Shareholder Meeting meets at least once ayear within six months of the close of the financial year in order to rule on thefinancial statements of that year unless that period is prolonged by a legal ruling.The Meeting can only act legally when it is first convened if the number ofshareholders present or represented, or having sent postal votes, adds up to a quarterof those shares holding the right to vote. No quorum is required if the Meeting isconvened for a second time.The Meeting can make decisions using a simple majority of the votes of theshareholders present, represented or having voted by post.

Extraordinary General Shareholder Meeting

The Extraordinary General Shareholder Meeting can modify any of the Company’sstatutes and decide upon the transformation of the Company’s legal both civil andcommercial framework. This Meeting cannot, however, increase the commitments ofthe shareholders subject to the operations that result from regular regroupings ofshares.The Extraordinary General Shareholders Meeting can only legally make decisions if thenumber of shareholders present, represented or having voted by post adds up to, on



the first convocation of the Meeting, a third, and on the second convocation of theMeeting, a quarter of all shares holding voting rights. If this quorum is not reached,the second Meeting can be adjourned to a later date that must take place within thetwo months following the second convocation.The Extraordinary General Shareholders Meeting can rule using a two thirds majorityof those votes present, represented or having been cast by post, unless there havebeen legal infringements with those votes. In the Extraordinary General ShareholdersMeetings with a constitutive form, i.e. those called to deliberate on the approval of acontribution in kind or on the granting of a particular benefit, the contributor or therecipient is not entitled to vote either for himself or as a proxy.

Special Shareholders Meetings

If several classes of shares exist, no modification can be made to the rights of anytype of share without a vote in conformance with an Extraordinary GeneralShareholders Meeting that is open to all shareholders and, additionally, without a votein conformance with a Special Shareholders Meeting just for those shareholders of theparticular class of shares concerned.

Special Shareholders Meetings can only make legally valid decisions if the number ofshareholders present or represented adds up to at least, on the first convocation ofthe Meeting, half, and on the second convocation of the Meeting, a quarter of theoutstanding shares of the concerned share class.

For the remainder, Special Shareholder Meetings can be convened and can makedecisions according to the same conditions as Extraordinary General ShareholdersMeetings subject to the particular provisions applicable to the holders of preferenceshares that do not hold voting rights.

2.1.18 SHARE INDIVISIBILITY (ARTICLE 11)

As far as the Company goes, shares are indivisible. Shares that are co-owned arerepresented at General Shareholders Meetings by one of the owners or by a mutuallyagreed proxy. Failing agreement between them on the choice of a proxy, a proxy isdesignated by the order of the Chairman of the Commercial Courts (Tribunal deCommerce) ruling at the request of the most diligent co-owner.

The right to vote that is attached to the share belongs to the usafructuary in theOrdinary General Shareholders Meetings and to the owner in the ExtraordinaryGeneral Shareholders Meetings. However, shareholders can agree amongstthemselves the sharing out of the use of votes in General Shareholders Meetings. Inthis case they do have to let the Company know what they have agreed by aregistered letter sent to the Company’s headquarters. The Company is held to respectthis agreement for all General Shareholders Meetings that meet following a timeframeof one month pursuant to the sending off of the registered letter; the post mark onthe letter will act as the proof of the sending date.

2.1.19 THE PURCHASE BY THE COMPANY OF ITS OWN SHARES

The authorisation granted by the Mixed General Shareholders Meeting on 26 June2002 allowed the company’s board of directors to make stock market operations usingthe Company’s own shares in accordance with the following conditions and aims:

Conditions:

? the company can only buy shares in itself at a price that is, at the most, equal to 7Euros,

? the company will only be able sell all or part of the shares that have been acquiredin this fashion at a price that is, at least, equal to 90 cents. Please note that these



shares can be freely attributed in accordance with the conditions laid down by thelaw, notably in accordance to articles L. 443-1 and those following it in theEmployment Code (Code du Travail),

? the timeframe during which the purchases will be able to be made will expireat the same time as the above authorisation that has been given until theGeneral Shareholders Meeting that will be called to rule on the financialstatements for the financial year ended 31st December 2002 and at the latesteighteen months after the date of this meeting,

? during the timeframe referred to above, the maximum number of shareswhich the Company will be able to acquire in conjunction with this resolutionwill not be able to exceed a limit of 10% of the authorised capital.

As an indication, on the basis of the authorised capital and stock price at May 23rd,2002, a maximum number of 1,309,090 shares could be acquired; this corresponds toa maximum amount of € 1,335,271.80.

Aims:

? to ensure the regularisation of the Company’s stock price on the StockExchange;

? to promote the accomplishment of Company financial and growth operations,the purchased shares can be used to all ends and in particular can be, in theirtotality or just partially, kept, sold, transferred or exchanged;

? to be used in exchange, in particular within the framework of external growthtransactions ;

? to optimise the financial and asset management of the Company;? to attribute to employees and management according to the procedures set

out in the law, and notably within the framework of participating in the fruitsof the Company’s expansion, the share option purchase programme or theCompany savings scheme.

? to cancel them in accordance with the conditions and procedures defined bythe Mixed General Shareholders Meeting that met on the 26th June 2002.

Report on repurchase authorisation in the 25 June 2002 and 30 April 2003meetings

Authorisation has only been used during the liquidity contract signed with FortisSecurities. The amount of shares repurchased by SQLI over this period comes to46,002 shares acquired at an average price of €0.53 per share. The amount ofshares owned by SQLI as of 30 April 2003 came to 10,024 shares i.e. a value of€4,911 at a price of €0.49 each.

As of 30 June 2003, the company owned 2,347 SQLI shares as part of the tri-partyliquidity contract signed with Fortis Securities and Jean Rouveyrol.

The company did not submit new resolutions on repurchasing shares to the meetingconvened on 30 June 2003; consequently the company will no longer deal on itsshares from this date.

2.1.20 CROSSING OF THRESHOLDS (ARTICLE 12.2)

Apart from the respecting of applicable legal and regulatory obligations concerning thecrossing of thresholds, every corporate entity or natural person, acting alone on inconcert, who has come to own, both directly and indirectly, by the means of one or



several corporate entities, control, according to the meaning of article L. 233-3 of theFrench Commercial Code, over a number of shares or voting rights representing fivepercent of the authorised capital or of the voting rights in the Company or anymultiple of this same percentage, and this even if the aforementioned multiplesurpasses the legal threshold of five percent, must notify the Company, by the meansof a registered letter with a notice of reception sent to the Company’s headquarterswithin fifteen days of crossing over one of these thresholds, informing it of the totalnumber of shares and voting rights held.

This obligation to inform the Company applies, in conformance with the sameaforementioned conditions, ever time that the fraction of the authorised capital orvoting rights falls below one of the thresholds mentioned in the preceding paragraph.

If any of these provisions are not respected, the shares or the voting rights thatexceed the threshold will be deprived of their voting rights for all GeneralShareholders Meetings over the following two year period counting from the momentthat the situation has been regularised, as long as the request to deprive these rightsis made by one or several shareholders holding individually, or in concert, at least fivepercent (5 %) of the Company’s capital or voting rights. This request is registered inthe minutes of the General Shareholders Meeting.

2.1.21 SHAREHOLDER IDENTIFICATION (ARTICLE 10.2)

The Company holds the right according to the prevailing legal and regulatoryconditions, to request at any moment and at its own cost (the maximum costs aredefined by an order of the Finance Minister for the organisation that is responsible forthe clearing of securities), the name or, if it concerns a corporate entity, the name ofthe company, its nationality, year of birth or year of incorporation, and the address ofthe holders of the securities that confer immediate or longer term voting rights in itsown shareholder meetings, as well as the quantity of securities held by each holderand, if applicable, the restrictions applicable on the securities.



2.2 GENERAL INFORMATION ABOUT THE COMPANY’S AUTHORISED CAPITAL.

2.2.1 AUTHORISED CAPITAL

The authorised capital of the Company at the beginning of June 2003 amounts to€3,795,452.50, which is divided into 15,181,810 shares of the same class bearing afully subscribed and paid up nominal value of €0.25 each.

2.2.2 CHANGES IN THE AUTHORISED CAPITAL

Changes in SQLI’s authorised capital are as follows:

Date

Nature of the Operation

Increase incapital

Sharepremium andcontribution

No. ofsecurities

issuedPar

value

Cumulative authorisedcapital

Value Securities

Constitution Cash subscriptions made by theCompany founders

50,000F 0 500 100F 50,000F 500

24 August 1992 Capital increase due to theincorporation of profits

550,000F 0 5,500 100F 600,000F 6,000

16 April 1993 Capital increase due to theincorporation of profits

400,000F 0 4,000 100F 1,000,000F 10,000

10 May 1995 Capital increase due to theincorporation of reserves

1,000,000F 0 10,000 100F 2,000,000F 20,000

4 October 1999 Increase in reserved capital 150,000F 1,350,000 1,500 100F 2,150,000F 21,500

21 Mar. 2000(1)Merger-integration of SQLI* 314,000F 10,570,996 3,140 100F 2,464,000F 24,640

21 March 2000 Capital increase due to theincorporation of reserves, sharepremium, merger and profits carriedforwards

15,650,252.55F 0 159,460 18,114,252.55F 184,100

21 March 2000 Conversion of capital into Euros 0 0 0 €15 €2,761,500 184,100

21 March2000(2)(3)(4)

Share nominal/par value split 0 0 0 €0.25 €2,761,500 11,046,000

21 July 2000 Share capital increase due to IPO ofthe Company’s shares on the NouveauMarché

€488,500 12,701,000 1,954,000 €0.25 €3,250,000 13,000,000

12 December2000(5)

Cash capital increase reservedfor Mr. El Mouafik (ABCIAL)**

€19,475 759,525 77,900 €0.25 €3,269,475 13,077,900

4 January 2001 Cash capital increase reservedfor Mr. Cachaldora (IN VERSO)***

€3,250 106,470 13,000 €0.25 €3,272,725 13,090,900

15 July 2002 Cash capital increase reserved for FD5

and Sethi

522.727,50€ 1.777.273,50€ 2.090.910 3.795.452,50€ 15.181.810

* During the Extraordinary General Shareholders Meeting on the 21st of May 2000 SQL Ingénierie absorbedSQLI and the Company’s name was changed from SQL Ingénierie to “SQLI”. This operation took placeusing net asset values.** In the framework of the acquisition of ABCIAL*** In the framework of the acquisition of IN VERSO.

(1) Take over of the stock option scheme in the old SQLI



(2) Replacement of the stock option scheme in the old SQLI by a stock option scheme (bons de souscriptionde parts de créateur d’entreprises) known as « BCE 1 » which was adapted by the Mixed GeneralShareholders Meeting on the 21st June 2001.(3) The implementation of a complementary share option scheme (bons de souscription de parts decréateur d’entreprises) known as « BCE 2 » and replaced by a new scheme which is also called BCE 2 bythe Extraordinary General Shareholders Meeting that met on the 6th of July 2000 and which wassubsequently adapted by the Mixed General Shareholders Meeting on the 21st June 2001.(4) The implementation of a new stock option scheme known as “Stock Options 1 »(5) Prior to the 27th of November issuing of BSA by the Board of Directors to the benefit of Mr. El Mouafik,within the framework of the global delegation of powers granted by the General Shareholders Meeting onthe 21st of March 2000.

2.2.3 SECURITIES GIVING ACCESS TO AUTHORISED, BUT AS YET UN-ISSUED, CAPITAL

2.2.3.1 Securities giving access to capitalSpecial share option schemes (bons de souscription de parts de créateur d’entreprise– henceforth known as BSC) and general share option schemes are the only sharesissued which give access to capital.The special report drawn up by the Board of Directors, and reproduced in 4.2 of thisdocument, details the share option schemes for company founders and share optionschemes authorised before the Mixed General Shareholders Meeting on 21 March2000, 6 July 2000 and 26 June 2002.

The tables below summarise the main dispositions of the share option schemes andBSC plans:

Share subscription options allocated during the 2000, 2001 and 2002 financial years:

Plan no. 1 Plan no. 2 Plan no. 3

Date of the meeting 21 March 2000 21 March 2000 21 March 2000

Date of the board of directorsmeeting

4 July 2000 27 November 2000 27 July 2001

Total number of share subscriptionoffers allocated

37,556 22,955 317,650

Of which: Number of shares ableto be subscribed to by thecorporate officers of the company

0 0 0

Starting point for the right toexercise the share subscriptionoptions allocated


Expiry date of share subscriptionoptions


Exercise price of sharesubscription options

5 Euros 8.08185 Euros 2.3885 Euros

Methods of exercising sharesubscription options

The exercising right is acquired byannual tranches (2000, 2001 and2002)

None None

Share subscription options taken up during the 2000, 2001 and 2002 financial years: No option was taken up during the 2000,2001 and 2002 financial years

Share subscription options cancelled 1 during the 2000, 2001 and 2002 financial years:

Total number of share subscriptionoffers cancelled

6,031 21,350 39,503

1 These are options which have been allocated but which might not be exercised



Share subscription options still to be allocated at the end of the 2002 financial year: 11,912

BSCs allocated during the 2000, 2001 and 2002 financial years:

Plan no. 1 Plan no. 2 Plan no. 3

Date of the meeting 21 March 2000 6 July 2000 26 June 2002

Date of the board of directions or Board ofDirectors meeting

29 September and 27November 2000

29 September and 27November 2000

No allocation

Total number BSCs authorised 1,197,000 362,221 700,000

Of which: Number of shares able to besubscribed to by corporate officers of thecompany

149,386 34,640 0

Number of BSCs allocated 1,197,000 362,221 0

Starting point for exercising the BSCs 1 October 2002 29 September or 27 November2003, depending on the dateof the Board of Directorsmeeting

Expiry date of BSCs 29 September 2005 29 September or 27 November2005, depending on the dateof the Board of Directorsmeeting

Price of BSCs exercised 1.07 Euros 5 Euros

Methods of exercising BSCs The exercising right isacquired by annual tranches(1999, 2001 and 2002)

None

Total number of options lapsed 233.389 99.235

It is to be specified that the maximum dilution resulting from exercising these shareoptions or BSC warrants is, for a shareholder holding one share, 14.80% % beforetaking away cancelled or non-allocated warrants or options into account, 11.26% aftertaking away cancelled or non-allocated warrants or options into account, and 9.2%after taking away non-allocated or lapsed warrants or options into account.

2.2.3.2 AUTHORISED BUT AS YET UN-ISSUED CAPITALAdoption of the following resolutions will be proposed to the Extraordinary GeneralShareholders Meeting which will convene on 30 June 2003:

RESOLUTION 12

Reduction of capital due to losses

The General Shareholders Meeting, ruling on the conditions required for quorum andmajority for the extraordinary general shareholders meetings, being fully aware of theBoard of Directors’s report and the Auditors’ special report:

1. decides to reduce share capital by an amount of 3,036,362 Euros to take it from3,795,452.50 Euros to 759,090.50 Euros, by reducing the face value of the company’sshares from 0.25 Euros to 0.05 Euros,

2. states that consequent to this capital reduction, the debit account balance is takenback to 1,622,668 Euros.

RESOLUTION 14

Delegation of the Board of Directors



The General Shareholders Meeting, ruling on the conditions require for quorum andmajority for the extraordinary general shareholders meetings, being aware of theBoard of Directors report and the Auditor’s special report, ruling conforming to thedispositions in paragraph 3 of article L225-129 III of the Business Code, delegates tothe Board of Directors the powers necessary for the purpose of proceeding to issue,once or several times, in the proportions and in the time period estimated, both inFrance and abroad:

(a) shares matched, or unmatched, of the company's stock purchase warrant;

(b) securities giving right by subscription, conversion, exchange, reimbursement,presentation of a warrant, combination of these means or any other manner, tothe attribution, at any time or fixed date, of securities which, for this purpose, areor will be issued as a representation of the company’s capital quota. Thesesecurities can take any form compatible with current laws and, especially, one ofthe forms set out in articles L225-150 to L225-176 of the Business Code or inarticles L228-91 to L228-97 of the same Code;

(c) warrants which confer to their owners the right to subscribe to securitiesrepresenting an amount of the company's capital, in order to allow exercise ofthese warrants, authorises the Board of Directors to increase the company's sharecapital; issue of these warrants can take place either by cash subscription or byfree allocation.

Capital increases can especially intervene by incorporation to the capital of all or partof reserves, profits, share premium, contribution premium, provisions or downpayments available, to carry out by the creation and free distribution of shares or byincreasing the face value of existing shares, or by a combination of these twoprocedures.

The maximum nominal amount of capital increases which can be carried out in virtueof powers delegated by the meeting to the Board of Directors in this resolutioncannot, in any state of cause and account not taken of adjustments likely to becarried out conforming to the law, be higher than a ceiling of 400,000 euros.

The maximum nominal amount of capital increases resulting from conversion,exchange, reimbursement or any other way, of rights attached to bonds or other debtsecurities can be issued in virtue of the powers delegated by the meeting to the Boardof Directors in this resolution, cannot be higher than a ceiling of 100,000 euros.

Securities set out in paragraphs (a), (b) and (c) above can be issued either in Euros orin foreign currencies. In the case where the currency used for an issue part of thisauthorisation is not the euro, the Board of Directors should, for the purposes of thisauthorisation, determine and state in its report the counter-value in euros of this issueby multiplying the amount of this issue in another currency by a multiplier equal tothe average of the bid and offer exchange rates of the euro against this currency fixedby the European Central Bank on the third working day following the date of themeeting of the Board of Directors during which it will be used for this authorisation.

It must be pointed out that the Board of Directors cannot make use of thisauthorisation for priority share or investment certificate issue purposes.

Except for the dispositions set out in the 15th resolution below, in the case of the issueand creation of securities set out in paragraphs (a), (b) and (c) above, owners ofshares existing at the time of the issue will have, to an irreducible security and



proportionally to the amount of shares they currently own, a preferential subscriptionright; the Board of Directors will each time fix the conditions and limits for whichshareholders can exercise their right to subscribe to a irreducible security, inconformance with current legal dispositions.

The Board of Directors can institute, to the profit of shareholders, a reduciblesubscription right which will be exercised in proportion to their rights and within theirrequests.

However, this decision involves express renunciation or, depending on the case,carries full right, to the profit of bearers or securities set out in paragraphs (a), (b)and (c) above, likely to by issued by virtue of the powers delegated by the meeting inthis resolution, renunciation of shareholders to their preferential subscription right tosecurities to which they give right whether this be by conversion, exchange,reimbursement, exercise of a BSC warrant or otherwise; in particular, if the generalshareholders meeting decides to cancel the preferential subscription right ofshareholders to shares issued by bond conversions set out in paragraph (b) above andto securities to which the warrants set out in paragraph (c) above give right.

The General Shareholders Meeting delegates all powers to the Board of Directors withthe ability to delegate to its Chairman the power to draw up the prices and conditionsof issues, set the amounts to be issued, determine the methods of issue and the typesof securities to create, set the dates and methods of subscription which can betransacted either in cash or by credit compensation, the issue date, even retroactive,of securities to issue and the conditions for repurchasing them, to proceed to alladjustments required in conformance with legal and regulatory dispositions and ,generally, take all useful dispositions and conclude all agreements to properlycomplete the issues planned, all conformance to current laws and regulations.

In the operations set out in paragraph (a) above, the Board of Directors canparticularly decide that the balance of capital increase that was not able to besubscribed, will be (i) allotted by its diligence either totally or partially to beneficiarieswhich it will designate (ii) offered either totally or partially to the pubic through apublic share savings offer or (iii) that the amount of capital increase will be limited tothe amount of subscriptions received if the legal conditions are met, it being specifiedthat the Board of Directors can use, in the order he judges correct, the abilities statedabove or just some of them.

If a securities issue gives right to the allocation of capital securities on presentation ofa warrant, the Board of Directors will have all powers to determine the methodsaccording to which the company will have the ability to buy BSC warrants on the stockmarket, at any time or during set periods, with a view to cancelling them.

The General Shareholders Meeting also confers all powers to the Board of Directors tobring the amendments deemed necessary by use of this authorisation to the statutes.

The General Shareholders Meeting sets the validity period of this delegation at 26months from this meeting, or up to and including 29 August 2005.

RESOLUTION 15

Ceiling for capital increases which can be carried out by securities issues setout in the 14th resolution, with removal of the preferential subscription right

The General Shareholders Meeting, ruling on the conditions of quorum and majorityrequired for the extraordinary general meetings, being aware of the Board of



Directors’s report and the Auditors’ special report, decides, conforming to thedispositions of paragraph 3 of article L 225-129 III of the Business Code, of removingthe preferential subscription rights of shareholders for issuing shares, securities andwarrants for which the meeting has accorded a delegation to the Board of Directors inthe previous resolution in the same conditions and for the same period as in theprevious resolution, except for what is specified in this resolution, for a maximumnominal amount of 400,000 euros.

The maximum nominal amount of capital increases resulting from conversion,exchange, reimbursement or any other way, of rights attached to bonds or other debtsecurities can be issued by virtue of the powers delegated by the meeting to theBoard of Directors in the previous resolution, with removal of shareholders’preferential subscription rights, cannot be higher than a ceiling of 100,000 euros.

It must also be pointed out that the authorisation amount of 400,000 euros and of theparticular ceiling of 100,000 euros stated above are charged to the overall nominalamount of 400,000 euros set out in the previous resolution.

Consequently, the meeting has decided to remove the shareholders’ preferentialsubscription right on the securities set out in paragraphs (a), (b) and (c) of the 14thresolution, as high as the amounts defined above.

Furthemore, this decision comprises express renunciation or, depending on the case,brings full right, to the benefit of holders of securities set out in paragraphs (a), (b)and (c) of the 14th resolution which are likely to be issued in virtue of the powersdelegated to the meetings in the 14th resolution, with removal of the shareholders'preferential subsciption rights, renunciation of shareholders to their preferentialsubscription rights on securities to which they give right; in particular, the meetingdecides to remove the preferential subscription right of shareholders to shares issuedby converting bonds set out in paragraph (b) of the 14th resolution and to thesecurities to which they give warrant rights set out in paragraph (c) of the 14thresolution.

For issues with removal of the preferential subscription right of shareholders, on theFrench market, the Board of Directors can, if necessary, confer to shareholders, for aperiod a depending on the methods it will fix, a priority deadline to subscribe tosecurities set out in paragraphs (a), (b) and (c) of the 14th resolution, in proportion tothe number of securities held by each shareholder, without hence creating negotiablerights. If the Board of Directors finds it appropriate, this priorty right can be exercisedfor both irreducible and reducible securities.

When these delegated powers are either totally or partially used, the Board ofDirectors must specify the methods for fixing the subscription price of these assetsand send the supporting report as laid down by the law.

This authorisation will terminate on 29 August 2005.

RESOLUTION 16

Authorisation for issuing BSC warrants

The General Shareholders Meeting, ruling on the conditions required for quorum andmajority for the Extraordinary General Shareholders Meetings, having read the Boardof Directors' report and the Special Auditors' Report and confirmed that the companyhas fulfilled the conditions laid down in article 163 b G of the general tax code,authorise, on suspended condition of adopting resolution 17 relating to the removal of



preferential subscription rights, once or on several occasions, of a maximum amountof 1,000,000 BSC warrants confers to their bearers the right to subscribe for eachwarrant to a new share of the company.

Each of these BSCs will give the right to subscribe to a share of the company, of aface value of 0.05 Euros each, representing an increase in capital of a maximumnominal amount of 50,000 Euros.

In conformance with the regulations of article L 228-95 second paragraph, theExtraordinary General Shareholders Meeting authorised these 1,000,000 new sharesto be issued, at most, and shareholders expressly gave up their preferentialsubscription right to these shares.

Authorisation to issue these warrants is given for one year from that day and sharesubscription rights must be exercised and the corresponding shares issued within fiveyears following the BSC issue date.

The Extraordinary General Shareholders Meeting fixes the issue price of each share inexercising a BSC to 100% of the average of the last twenty financial year’s closingprice of the company's share previous to the date on which the BSC was approved bythe Board of Directors. If an increase in capital occurred during the validation periodof this authorisation for a price per share above this average, to the price of a sharesubscription issued to increase capital.

RESOLUTION 17

Removal of preferential subscription rights

The General Shareholders Meeting, ruling on the conditions required for quorum andmajority for the Extraordinary General Shareholders Meetings, having read the Boardof Directors' report and the Special Auditors Report, decides to remove thepreferential subscription right of shareholders to the benefit of BSC allottees to bedetermined by the Board of Directors, in conformance with the regulations of article163b G of the general Tax Code.

RESOLUTION 18

Delegation of powers for BSCs

The General Shareholders Meeting, ruling on the conditions required for quorum andmajority for Extraordinary General Shareholders Meetings, having read the Board ofDirectors' Report and the Special Auditors' Report, delegates all powers to the Boardof Directors, conforming to resolution 17 above, of:

- deciding on BSC allottees, in conformance with the regulations of article 163b G ofthe General Tax Code;

- deciding the issue terms and conditions and the number of BSCs to be issued,once or several times, free of charge;

- deciding the conditions for BSC owners to exercise their share subscription rightsand to issue, especially, the date(s) for exercising warrants, the number of sharesto be issued, the price and issue date of these shares;



- submitting the allocation and BSC exercise conditions criteria to the SupervisoryBoard for ratification before issuing and allocating BSCs.

- stopping arrangements which would be adopted, in view of preserving the rights ofwarrant holders, should the company carry out new financial transactions.

- stating the number of the amount of shares issued by way of exercising warrants;

- collecting the subscriptions and payments due;

- stating the amount of increase in capital and make correlative changes to thestatutes;

- and, more generally, doing all that will be necessary or useful for implementingthis authorisation, in conformance with the resolutions of this shareholdersmeeting.

RESOLUTION 19

Delegation to the Board of Directors for increasing capital under theconditions set out in article L. 44305 of the Employment Code

The General Shareholders Meeting, ruling on the conditions required for quorum ormajority for the Extraordinary General Shareholders Meetings, having read the Boardof Directors’ report and the Special Auditors’ Report, authorises the Board of Directors,in application of the arrangements set out in article L 225-129 VII of the FrenchCommercial Code, by way of increasing capital authorised in resolutions 14, 15 and 16above, to carry out, once or on several occasions, within the conditions set out inarticles L 443-5 of the Employment Code, decided to increase the company's capitalby a maximum nominal amount of 36,273 euros, reserved for employees of thecompany who are members of the company saving scheme and the voluntary partnersalary saving scheme.

This authorisation lasts for a period of twenty-six months from this day.

The total number of shares which can be subscribed to by employees in virtue of thisdelegation cannot be higher than 3% of the company’s capital at the time of issuance.

The prices of share subscriptions will be fixed in accordance with the arrangementsset out in article L 443-5 of the Employment Code.

The Extraordinary General Shareholders Meeting delegates all powers to the Board ofDirectors to implement this authorisation and:

- to set the conditions required to profit from a subscription offer, in particularemployee seniority conditions and subscription deadlines, as well as all other termsand conditions relating to increasing capital;

- to take all measures useful for definitively fulfilling this increase in capital, andachieving all measures and formalities related to it;

- to consequently change the statutes and fulfil the advertising formalities of increasingcapital.



The Extraordinary General Shareholders Meeting decides to remove, to the benefit ofemployees who are members of the company’s saving scheme, the preferentialsubscription right of shareholders to share which will be issued.

RESOLUTION 20

Authorisation given to the Board of Directors to increase the Company’scapital during the public offer period

The General Shareholders Meeting, ruling on the conditions required for quorum andmajority for Extraordinary General Shareholders Meetings, having read the Board ofDirectors’ Report and the Special Auditors’ Report, expressly authorises the Board ofDirectors, in accordance with article L 225-129 IV of the French Commercial Code, touse all delegations conferred to it by this General Shareholders Meetings, includingthose relating to increases in capital authorised by resolutions 14 and 15 above, thepublic offer to purchase or exchange company securities.

This authorisation will expire on the decision of a Ordinary General Shareholders Meetingcalled to rule on the financial accounts for the year ending 31 December 2003.



Summary of delegations

AGE, nature of thedelegation and expiry date

Nature of the operation;;;;

Authorisednominal amount

Authorisation given

Residualauthorisation

AGE 26 June 2002, delegationto the Board of Directors,expiry 25 June 2003

700,000 BSC with a face value of€0.25

€175,000 0 €175,000

AGE 30 June 2003 resolution14, delegation to the Board ofDirectors, expiry 29 August2005

Issue of any share, asset orwarrant within a limit of €400,000with a face value of €0.05 pershare)

€400,000 0 €400,000

AGE 30 June 2003, Resolution16 delegation to the Board ofDirectors, expiry 29 June 2004

Issue of 1,000,000 BSC warrantswith a face value of €0.05

€50,000 0 €50,000

AGE 30 June 2003, Resolution19 delegation to the Board ofDirectors, expiry 29 August2005

Issue of shares to the benefit ofemployees within the limit of anominal amount of €36,273 (at€0.05 per share)

€36,273 0

,

€36,273

2.2.3.3 Potential dilution and share of shareholders equity

Summary of securities issued other thanshares before the Shareholders Meeting on

30 June 2003

…………………………………………

Number…………………………………………………………

……..

Subscription price ofoptions or warrants(face value + issue

premium) (in Euros)

BSPCE 1 1,197,000.00 1,280,790.00

BSPCE 1 minus securities lapsed 963,611.00 1,031,063.80

BSPCE 2 362,221.00 1,811,105.00

BSPCE 2 minus securities lapsed 262,986.00 1,314,930.00

BSPCE 3 (1) 700,000.00 350,000.00

BSPCE 3 minus securities lapsed 700,000.00 350,000.00

Subscription Options 1 37,556.00 187,780.00

Subscription Options 1 minus lapsed securities 31,524.00 157,620.00





Total 2,637,382.00 4,573,900.90

Total minus lapsed securities 2,237,873.00 3,530,939.28

(1) These 700,000 BSPCEs have not been attributed by the Board and Directors and should lapse when the nextmeeting takes place. For the purposes of this summary they have been valuated on the basis of an issue price of€0.05 per share.



Effect of BSPCE issues andshares submitted to the vote of

AGE on 30 June 2003

Number ofshares

c

ShareholdersEquity

consolidated

Dilutionddddddddd

ddddd

SE / Share€

1. Before capital increase 15,181,810.00 491,000.00 0.03

2. Before capital increase and afterexercising all securities issued

17,819,192.00 5,064,900.90 14.80% 0.28

2b Ditto, minus lapsed securities 17,419,683.00 4,021,939.28 12.85% 0.23

3. After the issue of 1,000,000shares (BSPCE put to the vote on30 June 2003) (1)

16,181,810.00 991,000.00 6.18% 0.06

4. After the issue of 1,000,000shares and exercising all securitiesissued

18,819,192.00 5,564,900.90 19.33% 0.3


5. After the issue of 8,725,460 (2)shares of all securities issued and1,000,000 shares

27,544,652.00 9,927,630.90 44.88% 0.36


(1) Shares resulting from the exercising of the 1,000,000 BSPCEs proposed to the Shareholders Meeting on 30 June2003, valuated at an indicative issue price, for the purposes of this presentation, of €0.5 per share.

(2) Maximum amount of shares created in conformance with delegations which will be give by theShareholders Meeting on 30 June 2003 to the Board of Directors to increase capital by a maximum nominalamount of €400,000 and of €36,273 to the benefit of employees, i.e. 8,725,460 shares with a face value of€0.05 each. The indicative issue price for the purposes of this presentation is €0.5 per share.

2.2.4 CAPITAL AND VOTING RIGHTS DISTRIBUTION

The company does not have any information on the number of identifiableshareholders. The information set out below comes from movements recorded on thesecurities managed by face value. The main differences recorded between thedifferent shareholders situations from now on comes from the following main events:- Increase in capital to the benefit of new shareholders- Acquisition of double voting rights after three years following the face value

recording.- Change from nominative management to bearer management

To the company’s knowledge, there have been no notable transfers of a shareholderholding, or having held, more than 5% of the company’s shares which have takenplace since the company's entry in the Stock Exchange.



Distribution of capital and voting rights at the time of the company’s IPO:

Shareholders Number of shares % capital % voting rights

Jean ROUVEYROL(1) 5,174,700 39.81% 54.95%

Alain LEFEBVRE(1) 1,818,240 13.99% 10.12%

Hervé GRIFFON 672,420 5.17% 3.74%

Bruno LEYSSENE 316,920 2.44% 3.26%

Total founders 7,982,280 61.40% 72.08%

Innovacom 3 964,260 7.42% 5.37%

Dassault Développement 964,260 7.42% 5.37%

Other named shares 1,135,200 8.73% 6.32%

Public 1,954,000 15.03% 10.87%

Total 13,000,000 100% 100%

(1) and their family group

Increase in capital on 15 July 2002

The Mixed General Shareholders meeting on 26 June 2002, authorised the Board ofDirectors to increase authorised capital by 552,727.50 Euros by issuing new sharesreserved to FD5 and Sethis to the amount of 1,363,637 and 727,273 new sharesrespectively.

Distribution of capital and voting rights before the increase in capital on 15 July 2002

Shareholders Number ofshares

% capital Number ofvoting rights

% votingrights

Jean ROUVEYROL(1) 4,736,700 36.18% 9,437,520 52.11%

Alain LEFEBVRE(1) 1,810,740 13.83% 1,811,580 10.00%

Bruno LEYSSENE 311,420 2.38% 622,840 3.44%

Total founders 6,858,860 52.40% 11,871,940 65.56%

Innovacom 3 895,902 6.84% 901,402 4.98%

Other named shares 627,744 4.80% 627,744 3.47%

Public 4,696,106 35.87% 4,696,106 25.90%

Liquidity contract (balance as of 30 June 2002) (2) 12 288 0.09% 12 288 0.06%

Total 13.090.900 100% 18.109.480 100%

(1) and their family group(2) self-held shares



Distribution of capital and voting rights after the increase in capital on 15 July 2002


% capital Numner ofvoting rights

% votingrights

Jean ROUVEYROL(1) 4,736,700 31.20% 9,437,520 46.72%

Alain LEFEBVRE(1) 1,810,740 11.93% 1,811,580 8.97%

Bruno LEYSSENE 311,420 2.05% 622,840 3.08%

Total founders 6,858,860 45.18% 11,871,940 58.77%

FD5 1,363,637 8.98% 1,363,637 6.75%

Sethi 727,273 4.79% 727,273 3.60%

Innovacom 3 895,902 5.90% 901,402 4.46%

Other named shares 627,744 4.13% 627,744 3.11%

Public 4,696,106 30.93% 4,696,106 23.25%

Liquidity contract (balance as of 30 June 2002) (2) 12,288 0.08% 12,288 0.06%

Total 15,181,810 100.00% 20,200,390 100%


Distribution of capital and voting rights at 20 May 2003.


% capital Numner ofvoting rights

% votingrights

Jean ROUVEYROL(1) 4,736,280 31.20% 9,472,560 40.50%

Alain LEFEBVRE(1) 1,810,320 11.92% 3,620,640 15.48%

Bruno LEYSSENE 303,420 2.00% 606,840 2.59%

Total founders 6,850,020 45.12% 13,700,040 58.57%

FD5 1,363,637 8.98% 1,363,637 5.83%

Sethi 727,273 4.79% 727,273 3.11%

Innovacom 3 895,902 5.90% 1,791,804 7.66%

Other named shares 555,492 3.66% 1,016,676 4.35%

Public 4,736,379 31.20% 4,736,379 20.25%

Liquidity contract (balance as of 20 May 2003) (2) 53,107 0.35% 53,107 0.23%

Total 15,181,810 100.00% 23,388,916 100.00%


Dassault Développement, which has made no declaration of falling below the 5%threshold, is presumed to still hold more than 5% of the company’s capital. To thecompany’s knowledge, no one apart from Dassault Développement and the personsmentioned above own more than 5% of the company's capital or voting rights.

On 20 December 2002, 1,809,900 shares owned by Alain Lefebvre met the acquisitionconditions for double voting rights. On 21 March 2003, all shares owned byInnovacom 3 met the acquisition conditions for double voting rights.

2.2.5 PLEDGES ON SQLI SHARES OR SHARES IN ITS SUBSIDIARIES

None.



2.2.6 SHAREHOLDERS COMMITMENTS

At the time of the company’s IPO on 21 July 2002, the founders committedthemselves not to sell more than an annual maximum of 20% of their shares in thecapital of the Company calculated when the Company entered onto the NouveauMarché of the Paris Stock Exchange for a period of three years. This commitmentinitially covered 7,935,240 shares. On 20 May 2003, overall founders’ participation inthe company amounts to 6,850,020 shares (i.e. a decrease of 13.6% in comparison tothe number of shares owned by members of this group when the company wasintroduced onto the stock exchange).

The founders’ commitments will continue until 21 July 2003.

2.2.7 SHAREHOLDERS PACT AND AGREEMENTS

There are currently no shareholder pacts.

In the terms of the two agreements dated 12 February 2002, one SQLI shareholderhas ceded his share options to two other shareholders of the company, thus allowingeach one of them to acquire a number of shares that represents between 0.5% and1.1% of the company’s capital at a price of 2 Euros per share. These options can beexercised at any moment over a two year period starting from their conclusion. Theprice of these options was fixed at 0.13 Euros per share.

In application of the provisions of article L. 233-11 of the French Commercial Code,these agreements have been communicated to the CMF (Committee of the FinancialMarkets), which, on 13 March 2002, published them in summary form in the Bulletinof Obligatory Legal Announcements (BALO) as well as sending them on to the majorpress agencies and financial newspapers.

To the company’s knowledge no other agreement clause exists which might have animpact on SQLI’s assets, activity, financial situation, results and outlook.

2.2.8 POTENTIAL CAPITAL NOT YET ISSUED

Detailed information relating to the BSPCE schemes is mentioned in paragraph 4.2.

2.3 DIVIDENDS

The company has not paid any dividends in the last five years. The Company intendsto rebuild its equity capital.

2.4 THE MARKET FOR THE COMPANY’S SECURITIES

SQLI has been quoted on the Nouveau Marché of the Paris Stock Exchange since 21July 2000 (Euroclear 7547 – Reuters SQLI.LN – Bloomberg SQLI).

SQLI signed a liquidity contract with Fortis Securities which will run out on 21 July2003.

The company does not belong to a group. SQLI is the main group company.



Historic Market Capitalisation

In euros 2000 2001 2002 2003 (31/05)

Number of shares as of 31.12

(face value in euros)

13,077,900

(0.25)

13,090,900

(0.25)

15,181,810

(0.25)

15,181,810

(0.25)

Market Capitalisation 77,294,720 16,232,716 7,135,451 7,439,087

High 17.53 7.95 1.39 0.69

Low 4.8 0.92 0.31 0.45

Average 10.35 2.88 0.87 0.53

Last 5.9 1.24 0.47 0.49

Average Daily Volume 27,985 14,075 9,049 5,264

Net profit per share (in euros) 0.005 - - -

Net dividend per share - - - -

Source : Euronext (www.euronext.fr)

Highest, lowest and transaction volumes

In euros Highest Lowest Transaction Volume Transaction Valuein €M

January 2002 1.39 1.22 188,754 0.248

February 2002 1.38 1.2 125,078 0.166

March 2002 1.33 1.22 172,679 0.219

April 2002 1.28 1.1 355,276 0.426

May 2002 1.09 0.87 171,838 0.171

June 2002 1.06 0.81 120,735 0.105

July 2002 1.07 0.73 149,828 0.131

August 2002 0.86 0.72 78,730 1.138

September 2002 0.69 0.41 197,923 1.396

October 2002 0.54 0.31 100,340 0.881

November 2002 0.5 0.35 232,315 0.112

December 2002 0.76 0.47 395,996 0.258

January 2003 0.62 0.55 98,598 0.058

February 2003 0.64 0.49 105,982 0.058

March 2003 0.58 0.53 56,778 0.031

April 2003 0.55 0.49 138,382 0.069

May 2003 0.53 0.45 147,798 0.075

Source : Euronext (www.euronext.fr)



Historic SQLI share price over 1 year

Source : Boursorama (www.boursorama.com)



3 PRESENTATION OF THE COMPANY'S ACTIVITIES

3.1 GENERAL PRESENTATION

3.1.1 HISTORY

The company was founded in March 1990 with the aim of helping companies profitfrom new computer technologies. Right from the very first stages of the company’sdevelopment, SQLI (formerly named SQL Ingénierie), immediately positioned itself onthe Client/Server architecture market developing, in addition to its traditional ITConsultancy business, a Research & Development department focused on keeping upto date with IT technology changes.

1990-1995, the client/server years

SQLI, a pioneer in client/server business developed its reputation thanks to the strongvisibility of its technological awareness activities which was reinforced by the “field”experience of its engineers. This "active" new computer technologies awarenessprogramme enabled SQLI to remain permanently at the top of the IT field and to offerits customers pragmatic advice.

1995-1998, from client server to the Internet

From 1995, SQLI perceived internet technologies as a solution to the generalisationconstraints of the client/server model. To this effect, SQLI started to offer internettechnologies as the "universal client/server".As the market started to mature in terms of the different utilisation possibilitiesoffered by Internet technologies, SQLI was able to enlarge its service offering torespond to client expectations for different Internet applications (B-to-C, B-to-B, B-to-E).

1999-2000, accelerating its development to reach critical mass

In order to accelerate its development and respond to the very strong growth in themarket, SQLI carried out numerous operations:? strengthening its capital base with the entry of two specialised investment funds:

Groupe Dassault Développement and Innovacom 3 (1999)? the acquisition of SUDISIM based in Montpellier (1999)? the founding of a subsidiary called Keenvision to develop business consulting,

marketing, graphics and ergonomics activities (1999)? the founding of a subsidiary in Switzerland (Lausanne) and a subsidiary in the

United States (Boston) to develop technology awareness activities (1999)? IPO on the Nouveau Marché (2000)? the acquisition of ABCIAL (with offices in Strasbourg, Mulhouse, Dijon, Belfort and

Lyon), IN VERSO (in Geneva) and CARI (in Archamps, near Geneva) (2000)



2001-present, growth consolidation

Following all of the operations which were carried out in 1999 and 2000, SQLI, since2001, has started to review its organisation so as to consolidate its investments andbenefit from its increased scale (the closing of its branches in Mulhouse andArchamps, no new branches in Spain and the United States, and a reduction of itsworkforce…).

In 2002, as a continuation of the group's reorganisation, the Board of Directors tookthe measures necessary to enable the SQLI Group to adapt to the 2002 IT sectorrecession. This adjustment plan has lead to the closing of branches in Lille andSophia-Antipolis as well as making 50 people redundant. All these measures will beeffective at the end of the 1st quarter 2003

SQLI is now a major Internet systems Integrator player in France with its 11 regionalbranches (Paris, Lyon, Toulouse, Montpellier, Aix en Provence, Bordeaux, Dijon,Belfort, Strasbourg, Nantes and Rennes). SQLI is also present in French-speakingSwitzerland (Lausanne and Geneva). This network of branches enables the group tobe a visible player on its market and to be well recognised for its Internet expertise.

3.1.2 KEY FIGURES

Historic revenues and profits of the SQLI group.

In millions of euros 2000 2001 2002

Total Revenues 30.2 45.3 44.1

Revenues by activity

Engineering 22.7 38.0 39.6

Consulting 5.1 4.5 1.5

Others 2.4 2.8 3.0

Revenue by geographical area

France 27.5 40.0 38.6

Abroad 2.7 5.3 5.4

Operating Income 0.61 (3.4) (5.8)

Net Profit 0.04 (7.8) (9.3)

Shareholders Equity 15.2 7.5 0.5

Debt/Equity Ratio 18.3% 17.5% 160%

The perimeters are comparable to 2001 and 2002. ABCIAL became part of the groupin 2000 and its contribution to revenue increased to 0.5 million euros in 2000compared to 3.5 million in 2001.



Historic revenue by type of activity

2000 2001 2002

Banking – Insurance 32% 25% 23%

Telecoms – Transport 11% 3% 9%

Services 26% 29% 26%

Industries 13% 29% 28%

Retail 10% 6% 3%

Administration – Government Sector 8% 8% 11%

3.1.3 GROUP ORGANISATION CHART

Legal organisation chart of the SQLI Group as of 30 April 2003.

The % of minority shareholders is essentially made up of shares owned by corporateofficers or directors of the group’s companies; only 0.09% of Abcial is owned by aformer director of this subsidiary.

All subsidiaries of the SQLI Group have similar business activities to that of SQLI andare therefore able to offer their customer base the whole range of the group’s skills.SQLI SL (Madrid), 99.84% owned by SQLI, is not consolidated due to its insignificantnature and its lack of activity since it was founded (sleeping company).

The mixed general shareholders meeting on 26 June 2002 approved the merger ofSQLI with its 100% owned subsidiary Keenvision, with back effect from 1 January2002. It was carried out without increasing SQLI’s capital and gave rise to the creationof a merger dividend of €134,141. This merger entailed the immediate dissolution ofKeenvision, without need for liquidation.

SQL Logiciels was liquidated on 30 April 2002. There was no impact on SQLI as theliquidation amount (€20,889) had been provided for in the group’s accounts as of 31December 2001. The SQLI Group will continue to simplify the legal structure of thegroup.

The mother company is responsible for central services (accountancy, communication,marketing, management control, IT...) for all these subsidiaries. A percentage of thecost is invoiced to each subsidiary concerned on the basis of their respective revenue.

The mother company is responsible for the treasury management of its subsidiaries.Interest on current accounts is invoiced to the subsidiaries concerned.

All services benefiting another company of the group are invoiced.

SQLI

Group Mother Company

Sudisim99.95%France

ABCIAL99.73%France

CARI100%France

SQLI Suisse99.8%France

Techmetrix inc.97.5%

United States

INVERSO100%

Switzerland

SQLI99.84%Spain

PROFIL100%France



Activity management and accounting and financial management are ensured by acentral computer management system which is identical for all subsidiaries.

Details of these intra-group agreements are available in paragraph 6.4 (pages 124 to130) of the Auditors’ special report on regulated agreements. The contribution ofsubsidiaries to revenue and profits are specified in the annex to the consolidatedaccounts (pages 94 to 97) and in the management report (page 50 of §4.1 III).

3.2 PRESENTATION OF THE MARKET

The year 2002 was a very difficult year for the software and servicesmarket.

2002 marked the end of a period of strong growth between 1996 and 2001, when therevenue for the software and services market in France increased from 10.7 billioneuros in 1996 to 21.3 billion euros in 2001 (source: Syntec Informatique).

Pierre Audoin Consultants called 2002 “the worst in 10 years”. From October 2002,Syntec Informatique, issued a more pessimistic forecast with a decline from 2 to 5%in activity for 2002.

However, at the start of 2002, specialised firms and different market players did notanticipate such a recession, and had forecasted a conservative growth (9% for SyntecInformatique), to adapt to the general 'recession' context of the market. But all resultspublished during 2002 have shown that these forecasts did not ring true.

Hence, 2002 was the beginning of a recession period for IT consulting businessescompared to the 1992-1995 period. IT consulting businesses had to urgently revisetheir development plans: optimising costs, restructuring plans…

Market Outlooks in 2003

Pierre Audoin Consultants anticipate growth « of around 3% » in 2003. Syntec hasannounced a very slight increase in activity, especially in project engineering andintegration.According to the IDC study, 85% of American and European companies are planningto increase their expenditure in IT and Communication. However, these forecastsmade by a panel of 1000 directors and DSI at the end of 2002 could not have takeninto account the 'wait and see' policy of companies since the beginning of the year.

Medium term outlook

The Internet services market has now reached maturity. Internet is not a nichetechnology but is wide spread and has a profound and lasting effect on companies' ITsystems. Internet usage within companies is now focused on opening andmodernising Information systems, and affects all business activities.This market is driven by companies' new usage of the Internet:? The development of new sales channels by the creation of shopping sites enabling

a company to enlarge its customer target base.? The improvement of customer services by the development of extranet

applications that enable the provision of more information and services to thecustomer services department

? The optimisation of supplier processes with the implementation of managementsolutions for the upstream-downstream supply chain (SCM, e-procurement...)

? The rethinking of internal management processes by the implementation ofintranet applications that enable the improvement of business productivity(processes, knowledge management, distance learning…)



Source: SQLI

In all these fields, studies show that companies will continue their investment in theseareas for 2 reasons:? They are at the heart of the general strategy to improve competitiveness? If returns on investments are still difficult, this is even more so for the integration

of Internet standards in companies’ IT systems which have potential to beoptimised and significant profits

Expectations and the level demanded by companies have also changed due to astronger maturity in IT usage, and the stake the information system represents in thecompetitiveness of the company.

Use a new sales channelfor clients

Develop the company’sprocedures for optimizingthe running of the company

Adapt the IS to the benefitof the company

Improve and simplifyexchanges with partnersand suppliers



3.3 THE COMPANY’S POSITIONING

The SQLI group, as well as being a consulting and integration group, specialises ininformation systems and e-business, and is at the heart of the needs of companies byoffering a complete service approach around their information system.

The role of SQLI is therefore to offer its clients a large spectrum of competencies andskills resulting from consulting to align information systems with project managementusing complex technologies.

3.3.1 PROJECT MANAGEMENT CAPABILITIES

Internet projects have changed in dimension: from pilot or one-off projects, they havebecome major projects of great importance for companies. The strategic aspect ofthese projects means that a capability to link and co-ordinate the different businessactivities (commercial, production, and IT) is needed as well as outsourced players(software providers, hosts)

All of these constraints mean that the management of projects becomes a key successfactor. Clear organisation is needed, as well as procedures and tools which enable thecompany to closely follow the progress made during the project, respecting deadline

groupe sqli reference document 2002 · sqli is a form of limited liability company (a french...

Documents